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WSJ's Jack Nicas on the US Airways and American Airlines Deal

Feb 14, 2013|

WSJ's Jack Nicas on the US Airways and American Airlines Deal

Transcript - will not be 100% accurate

Well the deal is done American Airlines merging with US -- it looks to me like US air came out on top of this thing we're joined by. Jack -- from the Wall Street Journal he's gonna help us understand the morning Jack. It so the deals done right to eight the year it is is US air effectively taking over American Airlines is that we're making glean from the article. -- not necessarily especially the chief executive of US Airways will be CEO of the combined airline which will be called American Airlines. However the rested the -- we in the management team has not been determined yet there's going to be mixing actions matching of unitary executive and America invective. And it simply -- the merger mean BAA mark creditors are getting out by far majority accompanied her to 72%. In this stocks are so. It's really the two companies are realizing that in order to compete with their big rival united and helped that they need to merge and become a bigger combined airline. Are they handling the union situation is I know the unions are given an American a tough time. Yeah. Throughout American. Date in Chapter Eleven. And I've been problematic obviously you know there were there were -- cut. They're pension and other benefits. I'm however the merger. All of the unions especially in the American side are actually on board they've all. -- new agreements in American group whichever book content and now they've reached traditional agreement for the merger. The US there -- out of also done that in a fight and then our voting on a contract that includes traditional language as well so. With a merger beer and apps to reach joint labor contracts with they're new employee groups and and that's going to be sort of a you know elected -- always. However if you like the airline had a bit farther along and understand in the past. Is a jacket put on people don't understand -- CA MR American Airlines had a lot of debt so those debt. The debt holders of the bondholders American Airlines are they swapping that for stock in the new company. Effectively. Yet. OK so when will the new stock symbol because a US -- is Al CC American is now trading under AM RQ. So will their be they the they've got to combine these two entities at some point at that. Yeah I don't know that's been released yet I know the new cold and companies going to be called American Airlines group ink. Which is -- Yeah and they become the largest airline out there greatly surpass delta with a steel. Adult deductions second largest airline united as the biggest airline in the world right now and be new America and if you combine just sort of -- -- what American Airlines do rhetoric but right now. They're just slightly larger been united now it's unclear what's gonna happen. Oats merger you -- in the -- salvation is big and national patient of the network pitch he's calling up overlapping groups in. Consolidating. Flight to Europe. However. Both. You know the American Airlines and US Airways executive incumbent pop today. Were saying that listen we're here to grow you know where you're domestic that -- had adopted at organ we're gonna maintain a presence in Iraq and all are out and our state. -- -- -- wanna maintain their roots I would think with -- wanna do is eliminate positions in their two home offices -- MP US -- is in Phoenix. And American Airlines is in Dallas is one of those -- are will one of those home offices become the primary. Because you -- that big guy taken over as the US air guy Eric. Yes however. The US Airways management team will move could -- burst and Tempe Arizona Q did MRI headquarters in Fort -- While no kidding. No kidding that's that's a big deal so job elimination in the home offices probably not that many out in the field with pilots it and and roots is that -- here. Right yeah the debt quarters are are almost -- ministry of. -- -- Well it it would what does this mean for the consumer they like it our plane tickets gonna go up and pricing and who down in price we're gonna have better service or service. Honestly it it seems to be. A net net benefit for consumers and in some ways than in many ways. Honestly I'm -- -- you know all indications are that it's not gonna spend their. I know the logic of economics to tell you will be up last editors appear to block the bottom line is that there's very little overlap between. American airlines' route -- -- -- they literally only share twelve out of night more than 900 route and so they've been very little competitive problems here. And on top of that if you're an American or US there was fires. Think your frequent fires -- -- to -- a combined a mile which could put you into an elite status and also you're gonna have. And a lot more destinations Buick they're required to -- back 230 more. Airport the American Airlines and American Airlines fires are gonna have more than sixty new destinations. In the US -- -- Give any information on each of fleet because I fly US air and it seems like the US air flight planes are older. In the American Airlines maybe I just got lucky and got a couple brand new American airline planes that. Is one fleet older than the other do you have that data. Both both airline. Do -- relatively older planes however. American Airlines. As hundreds of new planes on order and they are going to have interpret your youngest beef industry. So well a lot of -- -- -- -- -- cute basically to swap out a lot of people who want and you know -- -- several years this is going to be. A very robust BA and in -- new era. Yeah I remember very remember when we got back from our flight we heard that American had some seats come up awful that was around Jeff so hold those planes it yeah. Flee the thing is they their cost of borrowing should go down break as their credit rating should improve after this merger with thank. Yeah you imagine especially obviously with American who is currently in -- a -- Yeah very go to Jack thank you very much clearance I appreciate. That's technique -- from the Wall Street Journal and that I guess that transition it's not expected to close until third quarter. Of 2013 -- take awhile and then you'll still see you know it takes. -- guess it'll be at least through the end of fourteen where you'll see this separate airlines operating but then. It they'll be a merger -- the whole thing is to try to eliminate. Jobs in -- Location does this mean more construction at Logan Airport they're gonna have to get us cleaning when you think about different gates they have different. I AB CD have to move things around and -- put everybody in one place. I don't know how much construction it will entail. But it does mean -- that you're going to be able to get more flights under one frequent flier program and I thank her for me it's it's always been. You know American has cut down some and either Boston based flights and now you'll be able to get he had in US -- unity of the get a lot more places under one man airline code as. In -- calling US there. I don't I don't go away from the name -- I wonder what. I mean American Airlines my gosh that's just like Coca-Cola and right now tonight. He when we come back we're gonna talk about a cancer startup company getting 47 million dollars in funding that's next on the financial exchange.